There is no perfect legal framework for the operation of gold trading floors

On December 10, some of VietNamNet’s readers, who are also investors on the ACB gold trading floor, came to VietNamNet’s office, and said that ACB did not contact them to explain the employees’ mistakes in quoting the gold sale prices as the bank wrote in its press release.

Meanwhile, the lawyers who VietNamNet has consulted with all said that ACB’s actions were illegal.

Lawyer Bui Quang Nghiem, Head of Nghiem & Chinh Law Office, said that the transaction between a legal entity and an individual is covered by the Civil Code. Article 389 of the law says that the transaction must be ‘voluntary, fair, good-willed, cooperative, honest and straightforward.’ The behavior by ACB of spontaneously selling investors’ gold and amending investors’ accounts must be seen as violating the said above article.

“The fact that an individual or legal entity spontaneously accessed other people’s accounts to sell other people’s assets or amend the information of the accounts to benefit the individual or the legal entity is illegal,” said Lawyer Tran Duy Canh, Head of the Luat Viet Law Office.

Canh stressed that the behavior should be seen as illegal even when the individual or legal entity changed the information to bring benefit to the owners of the accounts. In this case, ACB did this without asking for the permission from the account owners, and without the direction of competent agencies.

Canh said that under the current rules, there are not ceiling nor floor gold prices, which means that investors’ successful purchase of gold at the low price was legal. If ACB wants to repair the damages caused by the employees’ mistake, it must negotiate with investors, while it should not have spontaneously accessed the investor’s account.

When gold trading floor runner also makes trading deals

Lawyer Bui Quang Nghiem said that the current laws do not prohibit the runners of gold trading floors to make trading deals for themselves. Therefore, Nghiem said, this requires very strict requirements in order to ensure the fair and transparent operation of trading floors.

The problem now lies in the fact that state management agencies have not set up a perfect legal framework of the operation of gold trading floors. That explains why, in most disputes, investors always are at a disadvantage.

ACB is acting as both the owner of the gold trading floor, and the investor who makes trade deals for themselves. It also provides technology solutions, and it sets the rules for the trading floors, which means that ACB holds the handle of the knife. Therefore, ACB has not taken any responsibility for the troubles on the trading floor that occurred recently. Investors could not understand why the computers were suddenly suspended when the gold prices skyrocketed, which made them unable to sell gold, but able to buy gold.

ACB must not repair a mistake by another mistake

In principle, ACB must bear all the damages as the transactions have been completed.

Also in principle, ACB must not repair a mistake by another mistake, i.e it must not spontaneously buy or sell gold in investors’ account.

The amendment of the entries can be carried out only when this is allowed by the laws, or it is sure that this will not cause any damage to clients. If ACB apologizes to clients and the apology is accepted by clients, the issue will be settled by negotiations, which are respected and encouraged by the laws.